Tishwash: Al-Sudani to bank managers: Financial reform is not a slogan.. We will face the challenges without hesitation
Today, Sunday, Prime Minister Muhammad Shiaa Al-Sudani chaired a meeting to discuss banking reform procedures, in the presence of the Governor of the Central Bank and directors of government banks, while indicating that financial reform is not a slogan but a series of terms and procedures that the government intends to implement without hesitation.
Al-Sudani’s office said in a statement:
Within the framework of His Excellency’s follow-up to the plan to implement financial and administrative reforms in the financial and banking sectors, the Prime Minister, Mr. Muhammad Shiaa Al-Sudani, chaired, this evening, Sunday, a meeting that included the Governor of the Central Bank and the directors of government banks, in which the procedures and work mechanisms taken to achieve banking reform, which constitutes one of the… The basic steps for financial and economic reform that the government adopts in its executive approach.
His Excellency stressed that financial reform is not just a slogan, but rather a series of terms and procedures that the government is determined to implement without hesitation, and will face all the challenges and obstacles that hinder the progress of implementing systematic and thoughtful reform plans.
The Prime Minister directed the simplification of all banking procedures, and the preparation of a proposed list of facilities and simplified procedures to be presented within a week, in addition to providing a summary of the obstacles obstructing the banking reform process, and proposing effective and implementable treatments for them, in a way that helps in overcoming the approved traditional contexts, which transform… Without achieving the government’s goal of developing this important economic and service sector. ink
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Tishwash: Warnings of a banking collapse in Iraq.. Banks are without dollars and prices are on fire in the markets
CENTRAL BANK ACTIONS MAY LEAD TO A BANKING COLLAPSE IN IRAQ (ULTRA IRAQ)
Iraqi traders were surprised by the measures of the Central Bank of Iraq in preventing the circulation of Iraq through remittances entering and leaving the country, and the disappearance of the dollar from the banks, as well as the successive jumps in the exchange rates of the dollar against the dinar in local markets, amid warnings that the Central Bank’s recent measures would lead to a tightening grip on the dollar. To a banking collapse in Iraq.
The Iraqis were shocked by measures attributed to the Central Bank of Iraq to prevent the circulation of the dollar through remittances entering and leaving the country under the pretext of controlling the US currency crisis in Iraq.
In parallel with complaints from customers of some banks that they were not delivered the dollar, an official in the Central Bank of Iraq confirmed in a statement to Reuters that the government “will ban cash withdrawals and transactions in dollars as of January 1, 2024,” in a move aimed, according to the Director General. Investment and Transfer Management Mazen Ahmed called for “stopping the illicit use of about 50% of the $10 billion cash amount that Iraq imports annually from the Federal Reserve Bank in New York.”
The statement of the official in charge of transfers at the Central Bank caused anger among those dealing in the dollar, whether through banks and related to salaries for the private sector, or purchasing goods, travel, etc., which prompted the same official to issue an explanatory statement in which he accused “Reuters” of inaccurate journalistic formulations, and He said that the bank guarantees dollar deposits for citizens at any bank and receives them in cash, indicating that the statement means that the beginning of next year will witness “a cessation of cash withdrawals that includes transfers received only from outside Iraq according to certain arrangements that guarantee business sustainability and does not include in any way citizens’ balances in US dollars.”
Reasons for the central bank’s decision
Last year, the Central Bank of Iraq established a platform to regulate bank transfers, which constitute the bulk of the demand for the dollar, in order to control the fluctuation of US currency prices in the markets.
In March 2023, the Central Bank issued a third package of measures to “facilitate access to the dollar,” which aimed to control exchange rates in the parallel market and prevent the crisis from worsening. It was satisfied with those packages before resorting to what could be called “besieging the dollar . ”
Regarding the recent measures, economic expert Khattab Al-Damen says, “The Central Bank of Iraq finally resorted to implementing the exchange control system due to the crisis of the high exchange rates of the dollar against the dinar in parallel markets,” indicating that “the Central Bank took control of all transfers entering Iraq in US dollars, The beneficiaries are paid in Iraqi dinars according to the official exchange rate, which is 1,320 dinars per dollar, even though the exchange rate in the markets exceeds 1,600 dinars per dollar.
Speaking to “Ultra Iraq,” Al-Damen added, “The new system harmed the rights of those with remittances entering Iraq in US dollars, as a result of them obtaining official exchange rates that are lower than the parallel exchange rates in the Iraqi market. In return, the Central Bank obtains dollar transfers in exchange for a price.” The official exchange rate is in Iraqi dinars.
The Central Bank of Iraq took over dollar transfers to Iraq and disbursed them in dinars and at the official exchange rate
The implementation of this system by the Central Bank of Iraq, according to Al-Damen, came in an attempt to increase the Central Bank’s reserves of the US dollar, in light of the crisis of growing demand for the dollar for the purposes of import, treatment, travel, smuggling, and money laundering.
The economic expert expects that the implementation of this system will lead to an increase in demand for the dollar in Iraqi markets, as a result of the decrease in the dollar quantities that were flowing to individuals and companies from external transfers, considering that this decision is not commensurate with the conditions of an oil-producing country like Iraq whose exports of crude oil exceed 90%. Billion dollars annually.
According to Al-Daman, achieving balance in exchange rates requires drawing and implementing economic policies aimed at controlling the causes of the high demand for the dollar and its high prices in parallel markets, which is the collapse of the real production sectors in Iraq (the agricultural sector and the manufacturing sector) to reduce the growing imports, which have exceeded 18 million.
One billion dollars annually, according to 2022 statistics, in addition to the demand for the dollar for the purposes of smuggling and money laundering, and not controlling balances transferred from abroad, in a country that currently enjoys high oil revenues.
The disappearance of the dollar!
On the other hand, a source in one of Baghdad’s private banks says, “Private and government banks in Baghdad and the governorates have begun implementing the Central Bank’s decisions regarding not dealing in dollars and adopting the official prices of the dinar in remittances.”
Iraqi banks witnessed a significant scarcity of their dollar shares, which caused a crisis with customers
The source, who requested anonymity for functional reasons, while speaking to “Ultra Iraq”, indicated that “the Central Bank began reducing banks’ shares of the dollar through currency selling outlets in a step to enforce the instructions issued by it.”
The source confirms that there has been a “major scarcity in banks” during the recent period, “which has generated clashes and verbal altercations between banks in Baghdad and citizens who found themselves unable to withdraw their deposit transfers in dollars.”
The source points out, “A problem centered around the Central Bank’s recent actions, which is the issue of the country’s monetary supply, which is estimated at 85 billion dinars. Consequently, this liquidity is insufficient to cover the financial transactions of the government, which was relying on withdrawing the dinar against the dollar, which allows it to distribute salaries and meet needs.” “other”.
Traders in Iraq, who receive salaries in dollars, complained of not receiving what they receive as stipulated in their contracts, due to a government decision requiring dealing in the Iraqi dinar, whether for Iraqis or foreigners who receive their salaries from non-Iraqi companies or organizations.
Warning of a jump in exchange rates and a banking collapse
“The measures taken by the Central Bank regarding the countries’ crisis are floundering and failed and came due to pressure from the street and the government,” this is how the economic expert, Hammam Al-Shamaa, describes it during his talk to “Ultra Iraq.”
Banking collapse in Iraq soon with foreign remittances banned
Al-Shamaa adds, saying, “The Central Bank resorted to such a measure due to pressure from the US Federal Central Bank, which stressed to Iraq the importance of the dollar not going to Iran,” indicating that “due to the implementation of the new procedures of the Central Bank, the dollar will witness a major jump in the market as a result of these floundering policies.” .
A warning of a banking collapse in Iraq, issued by Al-Shamaa, as he said that “preventing external transfers by the banking sector will lead to the collapse of the banking sector soon since it essentially depends on the circulation and transfer of the dollar,” noting that “these measures will work to increase the gap between the citizen and the banks.” “This will have a significant impact on the banking sector in Iraq.”
According to economic experts , the inability of banks to deliver dollar transfers to beneficiaries in Iraq “will discourage financial transfers from abroad in the future,” a measure that is “not in the interest of the Iraqi economy and will specifically affect financial transactions.” link
Militia Man Article: “China hosts representatives from 130 countries at the New Silk Roads Forum” This Belt Road project is linking right through Iraq. Al-Sudani just met with Putin on his Development Road Project as well… The 10th anniversary of this coinciding with electronic systems hook ups in Iraq are looking to be timed accordingly…I like it.
RayRen98 ...I DO “BELIEVE” THAT IT HAS BEGUN!! RATES DID CHANGE IN IRAQ LAST WEEK…MAYBE AGAIN OVER THE WEEKEND? WAITING TO HEAR FROM SOME FOLKS WHO WERE EXCITED LAST NIGHT AND WERE LOOKING TO SEE SOMETHING (BEHIND THE SCENES) THROUGHOUT THE NIGHT…TIME WILL TELL
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MARKETS A LOOK AHEAD: “ENDGAME.” The Final Stage Has Begun.
Greg Mannarino: 10-15-2023
https://www.youtube.com/watch?v=ifPfc6jMSbk